Excellent year for LVMH in 2002 : Operating income +29 % ; Cash flow from operations +65% ; Objective of new growth in 2003

Wines & Spirits : strong growth in operating margin

Operating income for Wines & Spirits increased 16% in 2002 due to strong volume growth in the Group’s Champagne brands, notably Moët & Chandon, Veuve Clicquot and Krug. The improvement in margin over those achieved in 2000 and 2001 demonstrates the success of the policy of focusing resources on key markets and prestige cuvées.

Operating income for Cognac, where volumes increased by 6%, reached 328 million Euros in 2002, an increase of 5%. The entire Hennessy range made progress compared to 2001, reinforcing its worldwide market leadership in cognac. Steady growth for Hennessy in the United States and in Asia, China in particular, more than compensated for the lower sales in Japan.

Fashion & Leather Goods : an exceptional performance in a difficult market

Operating income for Fashion and Leather Goods reached 1 297 million Euros in 2002. Due to the appeal and quality of the products allied to a dynamic innovation policy, Louis Vuitton enjoyed a further increase in 2002 operating margin, achieving record levels which are unique in the luxury goods sector. The traditional products remain the key growth drivers at Louis Vuitton, while the year’s new attractions, the Tambour watch, Papillon bag or again, the Bob Wilson line, created a sensation around the brand. This spring’s launch of new bags by the celebrated Japanese designer, Takashi Murakami, holds great promise. Louis Vuitton’s exclusive distribution network was further strengthened in 2002 through the opening of an additional seven stores in the second half, notably the one in Tokyo Omotesando.

For the more recently acquired brands, notably Fendi and Donna Karan, 2002 has been a transitional year, led by their new management teams.

Perfumes & Cosmetics : success for new products

For the fourth consecutive year, Perfumes & Cosmetics significantly outperformed the market in a difficult economic environment, notably in the United States. Operating income, which reached 161 million Euros in 2002, grew at a faster rate than sales.

Parfums Christian Dior recorded double digit growth in operating income notably due to the successful launch of the new fragrance Dior Addict and the continued good performance of J’Adore. The new fragrances Eau Torride and Givenchy pour Homme as well as the development of Flower by Kenzo also contributed to the performance.

Watches & Jewelry : strengthening investment

In Watches & Jewelry, the LVMH brands grew market share in 2002, increasing their activity (+4%) in a depressed global market. Operating income is inextricably linked to stronger investments, which will bear fruit in future years.

Selective Retailing : tangible improvement in results from DFS and Sephora.

DFS recorded a slight increase in sales over the fourth quarter of 2002. Nevertheless, sales were down for the year, in what remains a weak global tourism market. DFS has however, achieved breakeven, largely thanks to rigourous central cost reduction, the closure of underperforming stores and the renegotiation of certain airport concession fees. The Asian stores performed ahead of expectations, compensating for the losses in the US.

Sephora achieved a material improvement in its results, due to the growth in operating margin in Europe and a tangible improvement in the US results, where the Sephora concept has had exceptional success( 25% increase in same stores sales).

A policy of rigourous management, combined with great selectivity when considering store openings was implemented in 2002. The Sephora operation as a whole should improve its results in 2003, and be profitable in the US.

Outlook for 2003 : an objective of further tangible growth in operating income

Sales for the first two months of 2003 confirm the positive trend observed over the second half of 2002, but are subject to a greater negative exchange rate impact, counterbalanced at operating income level by the hedging program.

This good organic growth (+7%) will enable an increase in operating income exceeding our objectives at the beginning of the year, propelled in particular by the exceptional success of Louis Vuitton, who reported a double digit increase in volume during the first two months of this year.

LVMH will continue in 2003 to focus on internal growth, on the development of its major brands and on exercising a very selective investment policy. The Group expects, as in 2002, an improvement in profitability and makes cash flow a priority.

After an excellent year 2002, LVMH is well positioned going into 2003. As has been the case in past crises, the geographic sales balance of its activities, the strength and complimentarity of its brands and the exceptional talent of its teams allow the Group to continue its growth and to gain market share and reinforce its leadership within the current environment.

LVMH has fixed itself an objective of a tangible increase in operating income in 2003.

At the AGM on 15^th May 2003, LVMH will propose the payment of a dividend of 0.80 Euro per share, an increase of 7%.

An interim dividend of 0.22 Euro per share was paid on 3rd December 2002. The balance of 0.58 Euro will be paid in June 2003.